The IRS is enforcing a new tax-reporting rule for freelancers using third-party apps like PayPal, Venmo, and Cash App. Starting in 2024, these apps will issue a 1099-K if you earn over $5,000 yearly. This update, part of a phased rollout under the American Rescue Plan, aims to improve reporting accuracy. (Source: CNET)
Distinguishing between taxable and non-taxable transactions remains complex, leading to delays in implementing the rule. Apps like Zelle, not holding funds, are exempt from issuing 1099-Ks. Taxpayers should prepare by separating business from personal transactions, and maintaining accurate records. How might this change affect your approach to filing taxes? Share your thoughts!
